Foreign buying returns as Hormuz risks eases, Fed caution caps upside
Foreign investors returned to Malaysian bonds in June, with net inflows of RM4.9b (May: -RM4.3b), as easing geopolitical tensions and continued confidence in Malaysia’s sound economic fundamentals lifted demand.
- Foreign holdings: Total foreign holdings increased to RM309.8b (May: RM304.9b), with foreign share of total outstanding debt up 13.2% (May: 13.1%).
- Key drivers: Foreign inflows surged during 10–16 June, with more than RM8.0b entering government bonds after the easing of US–Iran tensions and reopening of the Strait of Hormuz. The RM3.7b of government bond outflows on 30 June moderated the overall June inflow. Stronger domestic data and resilient fundamentals supported sentiment, but the FOMC’s shift towards a more cautious, higher-forlonger stance remained a headwind for emerging-market bond demand.
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